Dealing with Damaged Customer Vehicles on Your Lot

It's inevitable that a customer's vehicle will be damaged or stolen from your lot at some point or another. How you handle the issue can make all the difference.

March 15, 2024

By Barrie Charapp Beaty
Charapp & Weiss, LLP

A customer comes to your dealership to pick up their vehicle in service.  When your porter goes to get it at the back of the lot to wash it and bring it around, he notices that the window is smashed in, or even worse, it is completely missing.  It is inevitable that a customer vehicle will be damaged or stolen from your lot.  The customer executed a repair order that stated you are not liable for the vehicle or the contents inside.  While that legally may be the case, is telling the customer to call the police and file with their own insurance the best practice in handling this situation?

If you blow off customers who bring their vehicles to you for repair and their vehicles are damaged or stolen while in your care, your business and its reputation will suffer the consequences and you may lose some customers due to poor treatment. Other than the last few years in the car business, the service departments in dealerships have always been the bread and butter for dealers.  While you may sell a vehicle once every five years to a customer (most likely at a loss), service customers return, sometimes twice a year, to keep their vehicles in pristine condition.  How do you handle the customer that has their vehicle stolen or damaged from your dealership?

  • Maintain the Customer Relationship. Do not disregard the customer and the issue that occurred while the vehicle was in your care. It's your place of business with security features such as outside lighting, fences, and cameras. You may not be legally liable under the law, but making this a customer’s issue and not a dealership one isn’t the best customer relations approach.  If the windshield was busted, repair the windshield for the customer.  Taking care of your customers speaks volumes and may earn future business. Blow off the customer and you can bet they will take their service and new vehicle needs elsewhere in the future, as well as tell everyone they can about their experience with your dealership.
  • Put your carrier on notice. For some issues like major damage or when the vehicle is stolen, you need to put your garage carrier on notice.  The deductible may be high for some repairs such as windows or dents, but you want to have the carrier on notice for those customer vehicles that have sustained major damage or were stolen.  Your policy has a provision for damaged or stolen vehicles on your property, and you should use it.  You are paying for the policy and it's in place for these types of situations.  You may not be able to make the customer whole for a stolen vehicle, but you can pass the customer onto your carrier for your carrier to handle the situation.  Calling your carrier shows the customer that you care and have the insurance in place to make them whole.
  • Call the police. If the car is stolen or badly damaged to the point where insurance will need to be involved, you care enough about your property and the customer to call the police and file a police report.  Do not make the customer do it because that insinuates to the customer that you don’t care or that it’s their problem and not yours.  Moreover, insurance, yours or the customer’s, will require a police report number for the claim.

The bottom line is take care of the customer whose vehicle is damaged or stolen on your property, regardless if you are not liable or not at fault.